This are basic needs that human beings need to function normally this include; food, shelter, clothing and air. Things like radio, education, watches, and vehicles are not very basic. They are meant to have an individual have a happy and comfortable and luxurious life. Human beings have many wants but there are limited resources to satisfy the wants. Goods and services satisfy human wants because they have utility.
Utility is the ability of goods and services to satisfy human wants.it is also the overall effect of production so as to satisfy human wants. There are various types of utility namely;
- Form utility -This is created through changing the form of a raw material to a finished product. It is usually done during various manufacturing processes. The finished goods are in a better form for use than the raw materials.
- Time utility – this is created through warehousing or storage .producers creates goods in anticipation of demand. However the demand for a good may not be there when it is created. It then becomes necessary to store the goods until the time they are required for use by consumers.
- Possession utility -This is created through trade or exchange.
- Place utility -this is created through distribution. After goods have been produced, they must be moved to the places where they are required for use.
In satisfying human wants an individual can either produce or buy goods he requires using resources available. The resources are not always available. They are limited.e.g.
Money – this is a scarce commodity. Land-for production of food and may not be adequate because of high population. Climate-it may be unfavorable even when the land is available.